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Thursday, August 25, 2016

To everyone who has, more shall be given.

The richest Florentine families today were already at the
top of the socioeconomic ladder nearly 600 years ago, according to a recent
study by the Bank of Italy. And research by the Organization for Economic
Cooperation and Development shows that in many European countries, not only
wealth and income but even occupations tend to be “sticky,” passed on from
generation to generation.

More than a third of Italy’s richest people inherited their
fortunes according to a 2014 study of the world’s billionaires by the Peterson
Institute for International Economics. Germany may be prone to even more
concentrations of inherited wealth, research shows. Germany has the highest share of
inheritor-billionaires among developed economies, at 65 per cent. Overall,
heirs and heiresses make up about half of western Europe’s billionaires.

“In hardly any other country does social origin influence
one’s income as much as in Germany,” wrote Marcel Fratzscher, head of the
Berlin-based German Institute for Economic Research, in a recent book. “The
richest citizens are also those with the highest income. For to everyone who
has, more shall be given.” Germany’s high share of family wealth is in part a
consequence of a tax system that until this year allowed family-owned
businesses (including a large proportion of the medium-sized companies that are
the backbone of its economy) to pass on financial assets while paying almost no
estate tax.